By Austin Hill
What do Chick-fil –A and Starbucks have in common besides food and beverages? Controversy – and lots of it – as the executive leaders of both companies have taken public stands on one of America’s most contentious cultural and public policy issues.
You probably heard about the Chick-fil-A fiasco of last year. Founded by S. Truett Cathy, today the company is headed by Truett’s son Dan Cathy, and in June and July of 2012 the company and its franchisees was subject to maligning in the media and attempted boycotts by liberal activist groups because of public statements that Dan made about his support for traditional heterosexual marriage.
The fact that Chick-fil-A is one of the most successful restaurant enterprises in the world and that it employs lots of Americans simply did not matter to the liberal activists. It also didn’t matter that in 2010 Chick-fil-A became the global chain restaurant leader based on an “average annual sales per restaurant” calculation, nor did it matter that the company has one of the lowest franchise entry costs in the world, or that it receives an average of 20,000 applications to fill its annual 60-70 franchise openings each year. And it probably didn’t matter to the boycotters that they were reacting to one man’s opinion, an opinion that isn’t necessarily shared by all Chick-fil-A franchisees and employees.
All that mattered, apparently, was that Dan Cathy expressed the “wrong opinion,” so far as the liberal activists were concerned, and it was therefore time to bring harm to his company. After an initial backlash was attempted against the company and its franchisees, a “backlash against the backlash” eventually ensued and Chick-fil-A saw an uptick in their revenues. But the lesson of this episode was clear: some of our fellow Americans are quite willing to damage a local employer in their area if it seems politically beneficial to do so.
While opposing same-sex marriage was good for Chick-fil-A (even if only in the short-run), supporting it proved bad for Starbucks. In January of 2012 an executive with the publicly traded company drew fire for his public statement in support of same-sex marriage, which soon engendered a public boycott of Starbucks by conservative “pro-traditional marriage” groups. After a few months of declining sales, Starbucks CEO Howard Schultz was asked at a shareholder’s meeting about the wisdom of personal political statements being made by the company’s executives, to which Shultz replied, “"if you feel, respectfully, that you can get a higher return than the 38 percent you got last year, it’s a free country. You can sell your shares of Starbucks and buy shares in another company.” Starbucks sales continued to slide for a while, and then the controversy eventually evaporated – but the damage, if only in the short run, had been done.
The fact that Starbucks is by nearly any measurement one of the most socially responsible and generous companies in the world, apparently didn’t matter to the socially conservative activists. It apparently didn’t matter that Starbucks provides medical, dental and vision health coverage to nearly all of its employees including part-timers, nor did it matter that they lead the world in corporate recycling efforts and at times pay higher prices for coffee beans so as to ensure that they are patronizing coffee growers who pay “fair wages” to their workers. And the social conservatives who protested Starbucks over the marriage issue may very well have been unaware that the company has drawn other boycotts from gun control groups – along with support from gun enthusiasts -because Starbucks has resisted social pressure to ban concealed-carry weapons in their stores. Once again activists were reacting to the opinions of one or two executives – opinions that are not necessarily shared by all of Starbucks employees and shareholders – and there was not only willingness but a clear intent to damage the company.
Obviously, boycotts are in most cases perfectly legal, and often provide an appropriate way to express one’s opinions and preferences based upon expenditures that one doesn’t make. But given the current economic, cultural and political climate, individuals and activist groups would do well to become more thoughtful and careful about who gets targeted. In an effort to make a cultural or political statement, one can end up diminishing somebody else’s livelihood or even damaging one’s local community.
Targeting, protesting, boycotting – the plight of Starbucks and Chick-fil-A will likely become more common in the coming weeks and months, and probably will be felt by more and more businesses, including many local small business operators. In the aftermath of the Supreme Court ruling on same-sex marriage, employers will be faced with public pressure and lawsuits demanding employee benefits for same-sex domestic partners. And with the next implementation phase of Obamacare in January of 2014, businesses will be faced with public scorn and legal threats when they lay-off workers or cut employee hours while figuring out how to pay for Obamacare compliance.
There is a rough road that lies ahead for American enterprise. Activists and consumers alike would do well to become more thoughtful about the plight of the business owner, and less inclined to lash-out.
Comments are invited!
Send feedbacdk to: WatchDog
.
Showing posts with label Starbucks. Show all posts
Showing posts with label Starbucks. Show all posts
Sunday, June 30, 2013
Sunday, August 12, 2012
Starbucks, The Tech Sector, And The State Of American “Progressivism”
By Austin Hill
Something exciting just happened in San Francisco. And it should pose an intellectual challenge for those who call themselves “progressives.”
Starbucks, the Seattle-based coffee beverage giant, announced that they will soon allow mobile telephone purchases in their stores. Get the new app from San Francisco-based Square, Inc. on your smart phone, order your drinks in the store, and – presto! - pay the bill with your iPhone or Android.
Along with this new approach to sales, Starbucks is also investing $25 million in Square Inc., and Starbucks C.E.O. Howard Schultz (a bona fide “food and beverage revolutionary”) will soon join Square’s Board of Directors. This was all quite surprising news- especially the part about a coffee company buying into a tech company -but it was nonetheless a cause for celebration in the City by the Bay. Yet another local “tech start-up” appears to be on its way to big things – and this one will likely make mobile retail a mainstream phenomenon.
]In the world of business and technology this is certainly progress – consumers will soon be given more choices and convenience, while retailers will have more opportunity to sell their products and generate revenues. And those who choose to invest their money in either of these companies (both the private equity partners of Square, Inc., and the Starbucks stockholders) will likely reap financial benefits as well. But despite all this additional progress – for consumers, retailers, investors, and for San Francisco’s private sector economy - one nonetheless has to ask: can we really call this development “progressive?”
Along with being an epicenter for business development and economic progress (think Apple, Twitter, Cisco Systems, Facebook – and in a bygone era, Levi Strauss and Co.), the San Francisco Bay Area is also an epicenter of political and cultural “progressivism.” And while “progressivism” began in the U.S. as a humanitarian reaction to the social ills accompanying industrialization, today it has become an anathema to human achievement and private enterprise. The result of this bizarre confluence is simply this: there are lots of self-described “progressives” in the United States who enjoy the benefits of private enterprise and human progress, but who nonetheless support some of the most regressive ideas and attitudes that exist in our society.
Consider further the relationship between Starbucks and “progressives.” Few people in the world question the ethics of Starbucks, as their corporate mission statement has always included a quest for “a balance between profitability and social conscience.” Ensuring that farmers are paid reasonably for their coffee beans, investing in the communities where they operate stores, recycling and conservation initiatives, and extraordinary compensation packages for employees (the company provides health and dental benefits to many of their part time employees) - these and other important agendas comprise the way in which Starbucks has always operated.
Starbucks remained consistent with these virtuous-yet-costly policies during the worst of the “great recession,” even as its stock value was tanking (the company is now headed upward again and many portfolio advisors once again recommend it as a “buy”). Yet when it comes to “progressive” activism, Starbucks is treated like every other for-profit, publicly traded entity – the company is simply presumed to be “greedy” and selfish because it seeks to produce a profit, and thus is vilified and maligned.
For “progressives” who believe that vandalism is appropriate (if you don’t respect people’s rights to own private property- a core tenet of capitalism-then it’s easy to justify destroying somebody else’s property) Starbucks is a prime target. Since the days of the 1999 World Trade Organization conference in Seattle when “progressives” damaged and impugned the company in its hometown, Starbucks has remained on the “progressive” activists’ hit list, and even during the past year’s “occupy” uprisings Starbucks stores were frequently the first to get trashed when violence broke-out. The humanitarian and eco-friendly efforts of Starbucks don’t matter to “progressives” of this sort – all they know is that Starbucks is a successful American corporation with a trans-national footprint, and therefore they are to be hated.
More civil-minded “progressives” likely reject this type of vandalism and violence, and some may even acknowledge and support Starbucks for its socially responsible track record. Yet they also support a President who maligns and vilifies American corporations at every turn, and who has advanced a public policy agenda that has stifled the growth of free enterprise rather than encouraging it.
Other “progressives” may support tech companies like Square, Inc., yet resent the fact that many such companies only design their products in the U.S. and have them manufactured elsewhere. A thoughtful person would at least consider how government policies may have driven labor costs upward and made manufacturing unfeasible in the U.S. – but “progressives” generally prefer to just be angry at American companies and then push for more punitive corporate taxation policies.
And do “progressive” owners of Starbucks stock have any idea what their presidential candidate of choice has in mind for their dividends? Shares of Starbucks many produce nicely over the next several months, but unless the President is stopped in November, taxes on dividend income will skyrocket in 2013.
Self-described “progressives” – in San Francisco and elsewhere – can enjoy the benefits of private enterprise like everyone else. Yet if their deeply-held attitudes and ideas prevail in America long-term, they will successfully bring about a “regression” of things that are important to all of us.
Commentsw are invited!
Send feedback to: WatchDog
.
Something exciting just happened in San Francisco. And it should pose an intellectual challenge for those who call themselves “progressives.”
Starbucks, the Seattle-based coffee beverage giant, announced that they will soon allow mobile telephone purchases in their stores. Get the new app from San Francisco-based Square, Inc. on your smart phone, order your drinks in the store, and – presto! - pay the bill with your iPhone or Android.
Along with this new approach to sales, Starbucks is also investing $25 million in Square Inc., and Starbucks C.E.O. Howard Schultz (a bona fide “food and beverage revolutionary”) will soon join Square’s Board of Directors. This was all quite surprising news- especially the part about a coffee company buying into a tech company -but it was nonetheless a cause for celebration in the City by the Bay. Yet another local “tech start-up” appears to be on its way to big things – and this one will likely make mobile retail a mainstream phenomenon.
]In the world of business and technology this is certainly progress – consumers will soon be given more choices and convenience, while retailers will have more opportunity to sell their products and generate revenues. And those who choose to invest their money in either of these companies (both the private equity partners of Square, Inc., and the Starbucks stockholders) will likely reap financial benefits as well. But despite all this additional progress – for consumers, retailers, investors, and for San Francisco’s private sector economy - one nonetheless has to ask: can we really call this development “progressive?”
Along with being an epicenter for business development and economic progress (think Apple, Twitter, Cisco Systems, Facebook – and in a bygone era, Levi Strauss and Co.), the San Francisco Bay Area is also an epicenter of political and cultural “progressivism.” And while “progressivism” began in the U.S. as a humanitarian reaction to the social ills accompanying industrialization, today it has become an anathema to human achievement and private enterprise. The result of this bizarre confluence is simply this: there are lots of self-described “progressives” in the United States who enjoy the benefits of private enterprise and human progress, but who nonetheless support some of the most regressive ideas and attitudes that exist in our society.
Consider further the relationship between Starbucks and “progressives.” Few people in the world question the ethics of Starbucks, as their corporate mission statement has always included a quest for “a balance between profitability and social conscience.” Ensuring that farmers are paid reasonably for their coffee beans, investing in the communities where they operate stores, recycling and conservation initiatives, and extraordinary compensation packages for employees (the company provides health and dental benefits to many of their part time employees) - these and other important agendas comprise the way in which Starbucks has always operated.
Starbucks remained consistent with these virtuous-yet-costly policies during the worst of the “great recession,” even as its stock value was tanking (the company is now headed upward again and many portfolio advisors once again recommend it as a “buy”). Yet when it comes to “progressive” activism, Starbucks is treated like every other for-profit, publicly traded entity – the company is simply presumed to be “greedy” and selfish because it seeks to produce a profit, and thus is vilified and maligned.
For “progressives” who believe that vandalism is appropriate (if you don’t respect people’s rights to own private property- a core tenet of capitalism-then it’s easy to justify destroying somebody else’s property) Starbucks is a prime target. Since the days of the 1999 World Trade Organization conference in Seattle when “progressives” damaged and impugned the company in its hometown, Starbucks has remained on the “progressive” activists’ hit list, and even during the past year’s “occupy” uprisings Starbucks stores were frequently the first to get trashed when violence broke-out. The humanitarian and eco-friendly efforts of Starbucks don’t matter to “progressives” of this sort – all they know is that Starbucks is a successful American corporation with a trans-national footprint, and therefore they are to be hated.
More civil-minded “progressives” likely reject this type of vandalism and violence, and some may even acknowledge and support Starbucks for its socially responsible track record. Yet they also support a President who maligns and vilifies American corporations at every turn, and who has advanced a public policy agenda that has stifled the growth of free enterprise rather than encouraging it.
Other “progressives” may support tech companies like Square, Inc., yet resent the fact that many such companies only design their products in the U.S. and have them manufactured elsewhere. A thoughtful person would at least consider how government policies may have driven labor costs upward and made manufacturing unfeasible in the U.S. – but “progressives” generally prefer to just be angry at American companies and then push for more punitive corporate taxation policies.
And do “progressive” owners of Starbucks stock have any idea what their presidential candidate of choice has in mind for their dividends? Shares of Starbucks many produce nicely over the next several months, but unless the President is stopped in November, taxes on dividend income will skyrocket in 2013.
Self-described “progressives” – in San Francisco and elsewhere – can enjoy the benefits of private enterprise like everyone else. Yet if their deeply-held attitudes and ideas prevail in America long-term, they will successfully bring about a “regression” of things that are important to all of us.
Commentsw are invited!
Send feedback to: WatchDog
.
Subscribe to:
Posts (Atom)
